Prominin-1/CD133 (Prom-1) is a commonly used marker of neuronal, vascular, hematopoietic and other stem cells, yet little is known about its biological role and importance in vivo. Here, we show that loss of Prom-1 results in progressive degeneration of mature photoreceptors with complete loss of vision. Despite the expression of Prom-1 on endothelial progenitors, photoreceptor degeneration was not attributable to retinal vessel defects, but caused by intrinsic photoreceptor defects in disk formation, outer segment morphogenesis, and associated with visual pigment sorting and phototransduction abnormalities. These findings shed novel insight on how Prom-1 regulates neural retinal development and phototransduction in vertebrates.